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According to AMSTAT, the leading provider of corporate aviation fleet and operator information, the business aircraft resale market, having already experienced poor Q2 2013 transaction performance, saw a mixed bag of activity in Q3 2013 with some market segments doing better than others.
At a high level, Business Jet resale retail transaction activity was up from 2.3% of the active fleet in Q2 to 2.6% in Q3 2013. However, this percentage remains below a 20 year average of 2.9%. As in Q2, Heavy and Light Jet segments performed the best. Heavy Jets came close to their 20 year average of 2.3%, with 2.2% selling in Q3 2013, up from 1.8% in Q2 2013 and 1.9% in Q3 2012. 3.2% of Light Jets sold, up from 2.5% in the previous quarter and 2.6% in Q3 2012. The Medium Jet segment continued to face downward pressure with 2.1% of the fleet turning over in Q3 2013, versus 2.4%in Q2 this year.
In contrast to the Jets, Turbo‐Prop activity saw little change. In Q3 2013, 2.1% of the active fleet sold, versus 2.2% in Q2 2013, and 2.2% in Q3 2012.
Resale retail transaction counts were down quarter on quarter for Turbine Helicopters overall and within all segments. 1% of the fleet changed hands in Q3, versus 1.5% in both Q2 2013 and Q3 2012. 0.7% and 1.3% of the Multi Engine and Single Engine fleets changed hands in Q3 2013 versus 1.2% and 1.7% in Q2.
While overall the percentage of jets and turbo‐props for sale continues to contract, this trend continues to be inconsistent across market segments. Certainly, for both Q2 and Q3 2013, inventories of Heavy and Light Jets contracted. However, Turbo‐Prop inventories have remained relatively flat in Q2 and Q3 with 8% of the fleet for sale or lease. The inventory of Medium Jets continues to rise, from 12.8% in Q1 to 12.9% in Q2 and to 13.3% in Q3 2013. This is of particular concern given that the transaction activity for Medium Jets has also been declining.
The inventory of available used Turbine Helicopters continues to rise with 6.5% of the fleet for sale in Q3 2013 versus 6.1% in Q2 and 6% in Q3 2012. As with the Medium Jets, this is troubling given the contraction in Turbine Helicopter resale transaction activity.
Average asking prices for Jets and Turbo‐Props were either flat or down in Q3 over Q2. Heavy Jets saw very little change and asking prices in this segment seem to have stabilized. However, as in Q2, Light and Medium Jets continued to see price erosion in Q3 2013 versus Q2 2013 and Q3 2012. Turbo‐Props, the only segment of the market where prices had consistently appreciated over the past year, took a pause in Q3 with a 2% drop in asking prices over Q2. With increased inventories and reduced transaction activity, one might expect Asking Prices for Single and Multi‐Engine helicopters to have faced downward pressure. However, Multi‐Engines were up 0.6% over Q 2013 (albeit down 10.3% over Q3 2012) and Single Engines were up 1.8% over Q2 and up 3.6% over Q3 2012.
Upon reviewing the data, Andrew Young, AMSTAT General Manager said, “We were disappointed with the Q2 transaction performance and were hoping for a better Q3. In general, transaction activity for business jets and turboprops did pick up in Q3 and inventories were down. Both good signs. However, this performance is not consistent across all fixed wing segments with some doing better than others. The Turbine Helicopter resale market also continues to face challenges and we look to see improved transaction activity and lower inventories in this market in the future. In our last market update, we noted that Q3 is frequently the slowest quarter each year for resale market transaction activity. We’ll end this update by noting that Q4 is frequently the best quarter for transaction activity. Let’s hope.”
